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Please show step by step how to solve and if it is favorable or unfavorable and why. The following information is available for Patrick Products
Please show step by step how to solve and if it is favorable or unfavorable and why.
The following information is available for Patrick Products for the year:
Budgeted sales during the year | 5,000 units |
Actual sales during the year | 4,500 units |
Budgeted machine hours required for the year | 10,000 hours |
Actual machine-hours during the year | 9,000 hours |
Budgeted variable overhead costs | $2,500,000 |
Actual variable overhead costs | $2,375,000 |
What is the variable overhead flexible-budget variance for the year? Assume machine-hours as the only cost-allocation base.
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